Denver and the West

Budget options elusive

Lawmakers' hands tied in many areas, but higher ed may be a target

Colorado has a $17.6 billion state budget this year, but lawmakers trying to cut as much as $600 million in spending don't have many obvious places to go besides higher education.

That's because the amount legislators have real discretion over is much smaller than the total budget. Take away $4.1 billion in federal funding — much of which is matching money for state spending on specific programs — and take away more than $5 billion in revenue from fees devoted to services such as courts, regulatory agencies, highways and colleges, and what you're left with is the state's general fund of less than $8 billion. And in the general fund, the options are not plentiful.

Rep. Mark Ferrandino, D-Denver, a member of the legislature's Joint Budget Committee, said all programs must be scrutinized closely. But he pointed out that colleges and universities were hit hard by the last recession in the early part of the decade.

"If history is an indication of the future, which it often is," Ferrandino said, "higher education is definitely one of those discretionary areas that has a large amount of funds."

Higher education, which gets nearly 11 percent of the general fund, $812.9 million in the current budget year, is a huge target, although most lawmakers say they are loath to cut it.

"I want to move away from the idea that higher education may be No. 1 on the chopping block," said Rep.

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Terrance Carroll, D-Denver, who will be House speaker in the next session. "We haven't made those decisions yet."

The biggest chunk of the general fund, 42 percent of the total — $3.2 billion in the current budget year that ends in June — goes to public schools. However, the state constitution's Amendment 23 acts as a no- touch rule, requiring education funding to rise every year by at least the rate of inflation.

When it comes to funding schools, lawmakers can tinker only with secondary programs like transportation, extra funding for small and rural schools, English-language classes, vocational training, gifted and talented programs and special education. These programs total about $220 million in the current budget year.

Cutting any of them would be unpopular. The same could be said for the next largest slice of the general fund, the 20 percent spent on Medicaid and the Children's Basic Health Plan. These and other health care programs for the poor cost the state $1.5 billion and serve nearly 500,000 people including the disabled, the elderly, children and pregnant women.

Medicaid and the Children's Basic Health Plan receive federal matching dollars, so cutting state dollars from the programs would "get into a spiral and make it worse," said Rep. Don Marostica, R-Loveland, another JBC member.

A few Medicaid services are optional, meaning the state isn't required by the federal government to offer them to stay in the program, but few lawmakers would urge cutting them. The state, as it did during the last recession, may ask the federal government to increase Washington's share of matching money for Medicaid, at least for a few years.

Lawmakers also would be challenged in the current fiscal year to cut corrections, which represents another 9 percent of the general fund, $676.8 million. JBC members are pondering a delay in opening a prison in the next fiscal year that starts in July, a move that could save the state $16.6 million in the fiscal year and $38.6 million the year after that.

Gov. Bill Ritter, a Democrat, already has suggested that employees not get performance pay raises next year, but lawmakers are wondering if the budget should have $42.9 million in inflationary pay hikes.

Ritter has imposed a hiring freeze that officials hope will provide millions of dollars in savings in the current year.

In the last recession, lawmakers used more than $1 billion from fee-generated cash funds to balance the budget. Those funds have not been replenished, so they will provide less help during this downturn, budget officials say.

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